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Thursday, 13 March 2014

Insurance Products at Dyman and Associates: HSBC to Pay as Much as $32 Million over Insurance Claims

HSBC
Holdings Plc (HSBA) and Wells Fargo & Co. (WFC) agreed to settle
lawsuits by mortgage holders who alleged they were forced to pay for property insurance at
inflated rates.

HSBC
will pay as much as $32 million to resolve the claims, according to the
proposed settlement agreement filed Feb. 28 in federal court in Miami. The
Wells Fargo settlement agreement, filed yesterday in Miami, didn’t specify the
total amount the lender may pay.

The
deals follow an earlier $300 million agreement with JPMorgan Chase & Co.
(JPM) and a $110 million settlement with Citigroup Inc. (C) on the same issue.
Bank of America Corp. has also reached an agreement in principle to settle a
class-action by lenders over the insurance, according to a Feb. 18 filing in
Miami federal court.

Adam
Moskowitz, a plaintiff’s lawyer, said he didn’t have a total dollar figure for
the Wells Fargo settlement.

“We’re
certainly excited to present the settlements to the court so we can communicate
them to the class members,” he said. “We think this is a very good settlement
for homeowners nationwide.”

So-called
force-placed insurance is taken out on homes by banks or mortgage servicers
when, for example, a homeowner’s policy lapses or the bank decides the borrower
doesn’t have enough coverage. The homeowners alleged in class-action lawsuits
that the banks got a financial windfall by cutting deals with
insurance companies and over-charging borrowers for the coverage.